Some criticisms: 1. The government-business relationship to some extent is doing what it can, meaning that opportunities grow from human relationships. 2. The bottlenecking of 'private rewards' is partly (ironically) a response to the need to circumvent corruption which emerges from spreading wealth to a large number of parties. There may be a need in the current system for 'incentive economics' where goods and services are exchanged to the highest bidder, but money is saved by not giving money to everyone. Some of these factors emerge because of economic efficiency, not because of a solvable problem.

However, I do think the creative state is a good idea. There is a lot of opportunity to grow efficiency between the citizen and corporation-government roles. Particularly, crowd-sourcing big ideas using the internet to compound piecemeal or free contributions by thoughtful people including students has potential to spur vast differences in perceptible functionality, such as the way we use information. I'm speaking not only about my own work on categorical philosophy, but also the numerous young programmers who have produced apps and games which can be parsed for intellectual content.

There is potential to develop the symbolic layer between citizen and corporate-government by cheaply entertaining citizens in exchange for free ideas. The resulting firestorm of ideas can be used to create a more creative, more enjoyable society. It is not just about investing, but also about the module available to the least common denominator, and what that means for innovation potential.

It seems challenging to differentiate between the state investing in entrepreneurial roles and investing in "normal" government functions. Are loans for higher education similar to loans for solar energy companies and electric vehicle manufacturers? In each case the state has a goal that it lends funds to accomplish. I agree that states such as the US and the UK should be more entrepreneurial if for no other reason than to stay on a competitive playing field with other states that have greater government support and direction, but ultimately in a "Knowledge Economy" they have to let the "market" make most of the decisions.

Interesting article.
To some extent, political leadership must always have a vision for the future and that implies creating new markets according to economic trends/expectations analysis and market intelligence. If a given government believes that it should invest in ITC, for instance (e.g., the Finish case in the 1980's), through investing in education, infrastructure and subsidizing business, it is then channeling public money for an expected medium to long run return. If the US invests in Tesla, the goal is much broader than the simple business equations around Tesla's competitiveness. Electric cars, if successful, will have a huge overall impact in societies, with multiple gains in multiple fields ranging from energy, to environment, and consequently to public health, to name just a few. Public money is much less averse to risk because political leaders are less prone to respond to public outcries due to bad investments than their peers from the private sector in relation to their share-holders. Thanks Prof. Mazzucato for your inputs on such an important topic.

HI Mariana!
Congrats for article!
In my opinion, even thought, the governments only intervening in cases of "market failure", because in that cases (Nasa, Tesla, SBIR...etc) the private doesn't have "appetite" for investment in some markets.

U.S. taxpayers help, through various avenues, to create and maintains a massive pharmaceutical infrastructure here. Their payback is from companies like Gilead Sciences who demand $94,500 for the medication that promises a life-saving cure for hepatitis C. And that's just one example of many that demonstrate the need for serious reform of taxpayer-funded innovation investments.

Imagine if just the dollars lost to U.S. defence program cost overruns, scrapped projects and (im)pure research had been devoted to inventing practical technologies to provide directly what welfare benefits are spent on in profit motivated markets. For example, you'd have rammed-earth robots (now in 3D!) mass producing energy efficient habitation around the world that would revolutionize and erode the housing industry as we know it, which wouldn't be good for (precious, precious) 'growth' or my Weyerhaeuser stock. Anybody involved in such a benefits regime would 'pay' 'rent' by mastering skills through the interactive media and training systems that have already evolved for free on the internet, but specialized for standardized technology and jobs (not markets).

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